We are going to show what entries you need to do when you have just bought yourself some office supplies for 100. As office supplies are usually used for the less than a year and they aren’t separately all that expensive, there is no point in depreciating them and they are written right away into expenses.
Accounting Entries
When buying supplies like this we need to increase Office expenses and decrease Cash by 100.
| Debit | Credit | |
| Office Expenses | 100 | |
| Cash | 100 |
Reporting
We are going to assume that you had Cash of 2,000 in balance sheet before buying office supplies.
First in balance sheet we are going to decrease 100 from Current Assets – Cash and cash equivalents, resulting in Cash balance of 1,900.
Secondly we are going to add expenses into Income Statement. Namely we increase Administrative expenses by 100.
